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Clinton Health Plan Courts Business Allies

By

Laura Meckler and

Jackie Calmes

Updated Sept. 18, 2007 12:01 a.m. ET

Democratic front-runner Hillary Clinton's health plan for covering the uninsured was crafted in hopes of turning old enemies into friends, starting with small business, which would be offered the carrot of a tax break rather than threatened with a stick.

Question of the Day

It is just one of several things Mrs. Clinton is trying to do differently this year as she again attempts to provide Americans with universal health coverage. Her effort in 1993 and 1994 ended in failure, brought down by opponents including small business and insurance companies, and by the complexity of the plan itself.

Lobbyists for small businesses and insurance companies reacted somewhat positively to her new approach, which was unveiled yesterday at a campaign stop in Iowa.

This time, her plan, estimated to cost $110 billion a year, would allow people satisfied with their current coverage to keep it and allow businesses and individuals to seek new coverage from a menu of health plans modeled on that offered federal employees. Most options would be private insurance, though a plan modeled on government-run Medicare also would be available.

All Americans would be required to have insurance, but the Clinton campaign didn't say how the government would enforce the rule, saying that and other details would have to be worked out with Congress.

The News: Hillary Clinton proposed a sweeping plan to cover 47 million uninsured Americans, with new options for buying coverage and tax credits to help pay for them.

The Background: Her plan would require all Americans to have coverage but allow people who like what they have to keep it.

What It Means: Mrs. Clinton's initiative is one of several being proposed by presidential candidates, a sign the country may be ready for a new attempt to cover the uninsured.

Taking a page from Republicans, her plan would use the tax code to help people afford the premiums. Those forced to spend more than a certain percentage of their income on insurance would get a tax credit to help. It would be refundable and therefore valuable even to people who make too little to owe taxes.

"Every man, woman and child should have quality, affordable health care in America," the New York senator said, announcing the plan to a crowd of about 150 health-care professionals, patients, service-employees-union members and Iowa campaign supporters. "I intend to be the president who accomplishes that goal -- finally -- for our country." She promised to do so in a first term.

To pay for it, she would raise $52 billion a year by increasing taxes on households earning $250,000 or more, restoring tax rates to where they were when President Bush took office. She is also counting on $35 billion in savings to the government through a more efficient health system, savings that may or may not materialize.

She tries to woo small businesses by offering a new tax credit to companies that offer health insurance to their workers. Under the previous Clinton plan, small businesses that failed to cover their workers would have been forced to pay fines. Mrs. Clinton didn't give full details for how the tax plan would work, but aides said that businesses with about 25 or fewer workers would qualify for the help, with the credit phased out as the businesses' work forces grow larger.

Large employers would again face a mandate: provide health insurance for workers or pay into a government fund to help cover them. The vast majority of big employers already offer insurance, but only about half of businesses with 10 or fewer workers do so, the campaign said.

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The Clinton plan also offers a new temporary tax credit to aid auto, steel and other manufacturing companies that spend a huge sum on retiree health costs.

Lobbyists for small-business owners were tentatively optimistic, though awaiting details. "One of the standout features of this is it specifically looks to help small business owners, and that's a good thing," said
Michael Donohue,
spokesman for the National Federation of Independent Businesses.

In a sign that the campaign was working hard to at least nullify opposition from the group, the NFIB was invited to participate in a briefing on the plan with Clinton aides. The outreach is just one in a series of steps Mrs. Clinton is taking toward trying to win over business. For months, she has been meeting with business leaders one-on-one and in small groups to explore health-care issues. Many have come away impressed, including
Eric Schmidt,
chief executive of
Google Inc.
"She was organized; she knew her stuff; she listened carefully; she responded to ideas," he said.

Reaction from insurance lobbyists was hardly confrontational. "The new Clinton plan includes important ideas to make coverage more affordable," said a statement from
Karen Ignagni,
president of the lobby group America's Health Insurance Plans. "Unfortunately, some of the divisive rhetoric seems reminiscent of 1993."

Clinton Health Plan Courts Business Allies

Democratic front-runner Hillary Clinton's health plan for covering the uninsured was crafted in hopes of turning old enemies into friends, starting with small business, which would be offered the carrot of a tax break rather than threatened with a stick.